The Reserve Bank of India (RBI) has taken strict action against X10 Financial Services Ltd., a non-banking financial company (NBFC) based in Mumbai.
The RBI canceled the company’s registration due to problems in its digital loan operations. X10 Financial Services had been providing loans through several mobile apps.
This step is part of the RBI’s ongoing efforts to address issues in the digital loan sector.
In recent times, the central bank has been canceling licenses and imposing penalties on NBFCs and banks for failing to follow proper guidelines.
Problems with Outsourcing and Guidelines
X10 Financial Services outsourced key functions such as credit appraisal, interest rate setting,
and customer verification (KYC) to various service providers, including Wecash Technology, XNP Technology, and others.
The RBI found that the company did not follow the required rules for outsourcing financial services. Additionally, X10 failed to conduct proper investigations into the service providers it worked with.
The company, formerly known as Abhishek Securities Limited, had received its registration in June 2015.
After the cancellation of its license, the RBI clarified that X10 Financial Services is no longer allowed to operate as an NBFC.
Irregularities in Digital Loan Operations
X10 Financial Services collaborated with several service providers, such as Yarlung Technology, Xinrui International, Omelette Technology, Mad-Elephant Network Technology, and Huidatech Technology, to offer loans.
However, the RBI stated that X10 violated outsourcing guidelines by not following the required code of conduct.
The company had delegated critical operations like credit appraisal and KYC verification without proper oversight.
With its registration now canceled, X10 Financial Services cannot continue functioning as an NBFC, according to the RBI’s directive.
